- WTI's Friday bounce still sees Crude Oil down for a seventh straight week.
- US Crude Oil fell to a near-term floor of $69.01 on Thursday.
- OPEC's pumping caps are seeing little impact as Chinese demand slumps.
Crude Oil markets are seeing a moderate recovery on Friday with West Texas Intermediate (WTI) climbing two percent on the day, but pressured oil markets are still set for a seventh straight week of declines.
The Organization of the Petroleum Exporting Countries (OPEC) scrambled to solidify a group-wide agreement on production cuts after member states came to loggerheads over pumping quotas. Key OPEC members, headed up by Saudi Arabia, have aggressively pursued tighter production caps in order to keep Crude Oil prices bid. However, flagging fuel demand, specifically from China, and disobedient OPEC member states decrying production caps are throwing a wrench in OPEC’s efforts to intentionally undersupply global Crude Oil Markets.
OPEC’s current production caps see the oil cartel agreeing to a combined 2.2 million bpd cut to total Crude Oil production through the first quarter of 2024, but fossil markets remain skeptical about OPEC’s ability to enforce the loose agreement.
OPEC currently has no mechanism of enforcing Crude Oil production quotas, and there is currently no punishment for member countries that choose to flaunt pumping limits and sell more oil than OPEC agreements allow.
Adding fuel to the fire, Chinese imports of Crude Oil declined by 9% in November compared to last year as Chinese demand for fossil fuels sumps alongside China’s growth metrics.
Despite OPEC’s production-limiting efforts, Crude Oil supplies remain well-stocked with barrel inventories at healthy levels, sending the price of Crude down into multi-month lows.
WTI Technical Outlook
Despite Friday’s rebound after finding a floor on Thursday at $69.01, Crude Oil remains firmly under-bid after closing in the red for five consecutive days into Tuesday, and WTI is on pace to end in the red for a seventh straight week.
WTI Crude Oil daily candlesticks remain firmly capped by the 200-day Simple Moving Average (SMA) near $78.00, with the 50-day SMA accelerating into the downside at $80.00.
Seven straight weeks of declines have dragged WTI down nearly twenty percent plus a half from the last peak of $89.64, and US Crude Oil is down nearly twenty-seven percent from September’s peak just below $94.00 per barrel.
WTI Daily Chart
WTI Technical Levels
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